1. 1
`
CENTRAL ELECTRICITY REGULATORY COMMISSION
NEW DELHI
No. L-1/42/2010-CERC Dated 28th
September 2010
NOTIFICATION
In exercise of powers conferred under Section 178 of the Electricity Act,
2003 (36 of 2003) and all other powers enabling it in this behalf and after
previous publication, the Central Electricity Regulatory Commission hereby
makes the following regulations, namely:-
CHAPTER I
GENERAL
1. Short title and commencement
(1) These regulations shall be called the Central Electricity Regulatory
Commission (Regulation of Power Supply) Regulations, 2010.
(2) These regulations shall come into force from the date of their
publication in the Official Gazette.
2. Definitions
(1) In these regulations, unless the context otherwise requires:
(a) "Act" means the Electricity Act, 2003 (36 of 2003), including
amendments thereto;
(b) “Agreement” means the power purchase agreement between the
Beneficiary and the Generating Company which owns the generating stations

2. 2
or the bulk power transmission agreement between the Beneficiary and the
Transmission Licensee, as the case may be, or such other agreements by
whatever name called binding the Generating Company/Transmission
Licensee and their Beneficiaries;
(c) "Beneficiary" means the person who has been allocated electricity or is
being supplied electricity generated from a generating station through long-
term access or medium–term open access or who is a user of the
transmission system of a transmission licensee, as the case may be;
(d) "Commission" means the Central Electricity Regulatory Commission
referred to in Section 76 of the Act;
(d) "Defaulting entity" means a beneficiary having outstanding dues of
a generating company or a transmission licensee or not maintaining the
required Letter of Credit or any other agreed Payment Security Mechanism in
terms of the Agreement;
(e) “Default Trigger Date” means the date from which the default in
payment or default in maintaining Letter of Credit or any other agreed
Payment Security Mechanism has been established.
Explanation I:- In case of non payment of dues, this date shall be
the next working day after completion of the 60 days period from
the date of service of the bill by the generating company or the
transmission licensee as the case may be.
Explanation II:- In case of non maintenance of the required Letter
of Credit or any other agreed Payment Security Mechanism, the
Default Trigger Date shall be third working day after the payment
security mechanism, as per the Agreement, ceases to exist.;
(f) “Load Despatch Centre” means Regional Load Despatch Centre or
State Load Despatch Centre, as the case may be.

3. 3
(g) "Outstanding dues" means the dues of a generating company or of a
transmission licensee, which remains unpaid beyond a period of 60 days from
the date of service of the bill on the beneficiaries;
(h) "Regulating entity" means the generating company or the transmission
licensee, as the case may be, within the jurisdiction of the Commission, which
notifies the Regional Load Despatch Centre or the State Load Despatch
Centre, to regulate the power supply of the defaulting entity;
(i) “Regulated Entity” means the defaulting entity whose power supply is
regulated in accordance with these Regulations;
(j) “User” means a person such as a Generating Company including
Captive Generating Plant or Transmission Licensee ( other than the Central
Transmission Utility and State Transmission utility) or Distribution Licensee or
Bulk Consumer, whose electrical plant is connected to the ISTS at a voltage
level 33kV and above;
(2) Save as aforesaid and unless repugnant to the context or if the subject
matter otherwise requires, words and expressions used and not defined
herein, but defined in the Act shall have the meanings as assigned to them
under the Act.
3. Scope and Applicability: These Regulations shall be applicable to the
generating station and the transmission system where there is a specific
provision in the Agreement between the Beneficiaries and Generating
Company or the Transmission Licensee as the case may be, for regulation of
power supply in case of non-payment of outstanding dues or non-
maintenance of Letter of Credit or any other agreed Payment Security
Mechanism.

4. 4
CHAPTER II
PROCEDURE FOR REGULATION OF POWER SUPPLY
4. In case of the outstanding dues or in case the required Letter of
Credit or any other agreed Payment Security Mechanism is not maintained as
per the Agreement, the generating company or the transmission licensee, as
the case may be, may serve a notice for regulation of power supply, on the
Defaulting Entity, for reducing the drawl schedule in the case of the
generating company or with-drawl of open access/access to Inter State
Transmission System in the case of the transmission licensee.. Such notice
may be served on or after the default trigger date and shall include the
following details:
(a) The amount of outstanding dues against the Defaulting Entity or the
duration of non-maintenance of Letter of Credit or any other agreed Payment
Security Mechanism, as the case may be;
(b) Quantum and duration of reduction in drawl schedule of Defaulting
Entity in case the Regulating Entity is a Generating company or the quantum
and duration of denial of medium-term open access and/or long-term access,
as the case may be, in case the Regulating Entity is a Transmission licensee;
Provided that in case the Regulating Entity is a Generating company, such
notice shall also include the following additional details:
(i) Source(s) of power from which reduction/diversion is to be made in
case of regulation of power supply and quantum alongwith duration of
reduction of drawl schedule/ diversion of power from each of them ;
and
(ii) Whether reduction of drawl schedule of Defaulting Entity is likely to
cause reduction in generation or the excess power available
consequent to regulation is to be sold to any other entity, whether
directly or through trader; and

5. 5
(iii) In case of diversion of power, the particulars of the person to whom
power is to be diverted and the price agreed to be charged from such
person, if determined in advance.
Provided further that in case of sale through Power Exchange or
otherwise, the price may be intimated as and when such price is discovered.
Provided further that where the Regulating Entity is a Transmission
Licensee, such notice shall also include the transmission line or the
transmission corridor on which medium-term open access and / or long-term
access to the defaulting Entity is to be restricted, in consultation with the
Regional Load Despatch Centre/s in whose control area the transmission line
or transmission corridor is located and the source of power, preferably the
cheapest power station in that corridor from which schedule is to be restricted
by Regional Load Despatch Centre/State Load Despatch Centre.
5. A copy of the notice under Regulation 4 shall be forwarded by the
Regulating Entity to the Regional Load Despatch Centre or State Load
Despatch Centre in whose control area (s) the Regulating Entity is situated
with a request to prepare implementation plan. Copies of the notice shall also
be served on other concerned Regional Load Despatch Centres, State Load
Despatch Centres, Regional Power Committees.
Provided that the notice and request for preparing implementation plan of
regulation of power supply shall be served on the Defaulting Entity, concerned
Regional Load Despatch Centre, State Load Despatch Centre, and Regional
Power Committee and shall also be posted on the website of the Regulating
Entity at least three (3) days in advance of the proposed date of
commencement of regulation of power supply.
Provided further that the Regulating Entity shall undertake to indemnify,
defend and save concerned Regional Load Despatch Centre/State Load
Despatch centre and hold them harmless from any and all damages, losses,

6. 6
claims and actions, demands, suits, recoveries, cost and expenses, court
cost, attorney fees, and all other obligations by or to third parties arising out of
or resulting from the regulation of power under these regulations.
6. Upon receipt of the notice under Regulation 4 and within 3 days
thereafter, the concerned State Load Despatch Centre/Regional Load
Despatch Centre, in whose control area the Defaulting Entity is situated, shall
make a plan in writing for implementing the regulation of power supply and
shall inform the Regulating Entity, Regulated Entity, concerned State Load
Despatch Centres, Regional Power Committees, and Regional Load
Despatch Centres of the said Plan and shall post the implementation plan on
its website.
Provided that if in the opinion of the concerned Regional Load
Despatch Centre or State Load Despatch Centre, as the case may be, the
proposal for regulation of power supply made by the Regulating Entity cannot
be carried out under the prevailing system conditions, then it shall inform the
Regulating Entity of its decision in writing and the basis for such decision
within three (3) days of receipt of the notice under Regulation 4, along with the
expected date from which regulation can be implemented.
7. The plan for implementation shall be prepared by concerned Regional
Load Despatch Centre or State Load Despatch Centre, as the case may be,
in such manner that the amount of reduction in drawl schedule shall be
progressively increased in quantum in accordance with the notice given by the
Regulating Entity. Such progressive increase shall be in accordance with the
Agreement, if so mentioned in the Agreement.
Provided that for each case of additional regulation of power supply, a
three (3) days’ advance notice, under Regulation 4 shall be given , in writing
before actual implementation.
8. The regulation of power supply for the Regulating Entity shall be
implemented from the fourth day of the notice as per plan prepared by the

7. 7
Regional Load Despatch Centre/State Load Despatch Centre unless the
Regulating Entity requests cancellation of the regulation of power supply.
9. In case the Regulating Entity decides to withdraw or postpone the
regulation of power supply, it shall communicate its decision in writing to the
concerned Regional Load Despatch Centre or State Load Despatch Centre,
as the case may be, and the Defaulting Entity, along with reasons thereof.
Provided that the communication for withdrawal /postponement of the
regulation of power supply shall be given at least two days prior to the day of
withdrawl or postponement of such regulation.
Provided further that Regulating Entity shall communicate the time and
date of withdrawal of regulation of power supply, keeping in view that the
regulation of power supply has to be withdrawn immediately after the
outstanding dues are recovered.
10. Where the Regulated Entity has defaulted in making payment to both
Generating Company and Transmission Licensee, the regulation of power
supply on the Regulated Entity for these defaults shall be implemented
concurrently. The adjustment towards the Outstanding Dues shall be in
accordance with Regulation 17 of these regulations.
11. (1) During the period of regulation of power supply, the Regulated Entity
shall restrict its drawal to the revised schedule given by the Load Despatch
Centre and the deviations, if any, from the drawal schedule shall be subjected
to unscheduled inter-change charges in accordance with the Central
Electricity Regulatory Commission (Unscheduled Interchange charges and
related matters) Regulations, 2009 as amended from time to time.
(2) The Regional Load Despatch Centre or State Load Despatch Centre,
as the case may be, during the period of regulation of power supply, shall
consider the regulation of power supply taking into consideration grid security,

8. 8
and may temporarily suspend implementation of the plan of regulation of
power supply, if in its opinion, grid security is in imminent danger.
(3) The concerned Regional Load Despatch Centre shall keep Member-
Secretary, Regional Power Committee of the region informed of the
implementation of the regulation of power supply.
CHAPTER III
REGULATION BY GENERATING COMPANY
12.(1) The generating company shall be entitled to sell the power rendered
surplus due to regulation of power supply, to any person, including any of the
existing beneficiaries, during the regulation of power supply, subject to grid
security, as ascertained by the concerned Regional Load Despatch Centre, or
may reduce generation in case any of the above options is not possible. The
Generating Company shall inform the Regional Load Despatch Centre or the
State Load Despatch Centre, as the case may be, the Defaulting Entity and
Member-Secretary, Regional Power Committee of the region, of the quantum,
duration and rate of such sale.
Provided that, unless the Agreement otherwise provides, the liability to pay
the capacity charges of the generating station, in respect of which the
schedule has been restricted, shall be of the Regulated Entity.
(2) Open access in case of diversion of power shall be regulated in
accordance with the Central Electricity Regulatory Commission (Open Access
in Inter-State Transmission) Regulations, 2009, and Central Electricity
Regulatory Commission (Grant of Connectivity, Long-Term Access and
Medium-Term Open Access to the inter-State Transmission and related
matters) Regulations, 2009, as amended from time to time.
13. The amount received from sale of surplus power by generating
company due to regulation of power supply, shall be adjusted against the
outstanding dues of the Regulated Entity, after deduction of energy charges,

9. 9
trading margin and other incidental expenses borne by the Generating
Company, if any, and the remaining amount, if any, shall be passed on to the
Regulated Entity. As mentioned in Regulation 9 above, the regulation of
power supply shall be withdrawn as soon as outstanding dues are recovered.
14. During regulation of power supply, through a hydro generating station,
in order to avoid spillage of water, if a buyer cannot be found or is not found
for the full quantum of power rendered surplus, the generating station can
inject power under Unscheduled Interchange (UI) mechanism, if grid
conditions allow, with the permission of the Regional Load Despatch Centre in
which it is located, subject to the stipulations in the Central Electricity
Regulatory Commission,(Unscheduled Interchange charges and related
matters) Regulations, 2009, as amended from time to time. The loss of energy
charge, in case of spillage of water, shall be made good from the revenue
earned through sale of power and/or UI from injection of power rendered
surplus due to regulation, on first charge, and the balance amount shall be
adjusted in accordance with Regulation 13.
CHAPTER IV
REGULATION BY TRANSMISSION LICENSEE
15. On the request of a Transmission Licensee for Regulating the power
supply, the Regional Load Despatch Centre may, under intimation to the
concerned generating company, curtail the medium-term open access or
long-term access of the allocated power or power supply contracted by the
Defaulting Entity, on account of regulation according to the notice served
under Regulation 4 of these regulations, preferably from the cheapest
generating station in that corridor. The Regulating Transmission Licensee
may decide the quantum and duration of denial of open access/ access in
consultation with any of the concerned generating companies who have a
contract to sell power to the Regulated Entity and the concerned Regional
Load Despatch Centre. The Transmission Licensee can propose the quantum
and duration of regulation of power supply based on an estimated price,

10. 10
indications of which can be taken from the Power Exchange Uniform Market
Clearing Price and the prevailing price of electricity sold through traders
directly.
16. The generating company, as a result of reduction of open access shall
be entitled to sell the power rendered surplus due to regulation of power
supply, to any person including any of the existing beneficiaries, during the
regulation of power supply. The revenue received on account of sale of this
power shall be utilised in following sequence:
a) to pay the energy charges and any incidental expenses, including
trading margin if power is sold through a trader, of the generating
company
b) to pay the outstanding dues of the transmission licensee.
c) any remaining amount to be passed on to Regulated Entity.
17. In case of such reduction of drawl schedule, the liability of payment of
capacity charges for its original share in the generating station shall remain
with the Regulated Entity.
18. During regulation of power supply, through a hydro generating station,
in order to avoid spillage of water, if a buyer cannot be found or is not found
for the full quantum of power rendered surplus, the generating station can
inject power under Unscheduled Interchange (UI) mechanism, if grid
conditions allow, with the permission of the Regional Load Despatch Centre in
which it is located, subject to the stipulations in the Central Electricity
Regulatory Commission,(Unscheduled Interchange charges and related
matters) Regulations, 2009, as amended from time to time. The loss of energy
charge, in case of spillage of water, shall be made good from the revenue
earned through sale of power and/or UI from injection of power rendered
surplus due to regulation, on first charge, and the balance amount shall be
adjusted in accordance with Regulation 16.
19. In case the Regulated Entity owes outstanding dues to a Generating
Company and a Transmission Licensee simultaneously, the payments

11. 11
received from sale of power, after adjustment of energy charges and
incidental expenses of the Generating Company shall be shared by the
Generating Company and the Transmission Licensee in proportion to their
outstanding dues, till the dues are neutralised and the balance amount, if any,
shall be passed on to the Regulated Entity.
CHAPTER V
MISCELLANEOUS
20. Power to remove difficulty: If any difficulty arises in giving effect to
the provisions of these Regulations, the Commission may, by general or
specific order, make such provisions not inconsistent with the provisions of
the Act, as may appear to be necessary for removing the difficulty.
Sd/-
(Alok Kumar)
Secretary